A FRIGHTENING amount of pensioners are being forced to make "pay when you die" arrangements with councils to keep their family home, new figures reveal.

Elderly people are being forced to pay councils for care from their estate after they die

More than 19,000 retirees have effectively remortgaged their homes over the past five years in order for councils to cover the cost of their residential care because they could not pay for it otherwise.

Councils will then claim the money back from their estate after they die or when the home is sold, with any funds left over after the sale going to the homeowners' heirs.

Many people will also face care bills costing much more than their pension pot because the average time spent in a care home has increased over the past decade.

This year has seen a sharp increase in the numbers of people having to make the "pay when you die" deals, with a report last year revealing 15,000 people had signed up for the arrangement in the five years before.

The average time spent in a care home has rocketed over the past decade by 13 per cent from 829 days to 955 days but the real numbers of pensioners having to pay the charges could be much higher as only 75 of the 100 local authorities asked responded in time.

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The UK is facing an uncertain future on the funding of long-term care, especially with the care cap being delayed

John Perks

John Perks, managing director of insurer LV= retirement solutions, said: "The UK is facing an uncertain future on the funding of long-term care, especially with the care cap being delayed.

"Although many of us leave the workplace in good health, as we are living longer with the average retirement now 17 years long, the likelihood of us needing residential or domiciliary care is increasing. In addition, we are also seeing a rise in the length of time being spent in care.

"This highlights a very real need for many to consider a more flexible retirement income solution such as a fixed term annuity.

"Low interest rates, coupled with social care budgets being cut, create a worrying financial backdrop for many, especially those already in retirement as they are currently faced with an open ended bill which makes it difficult to plan effectively to fund these costs.

"We would encourage those individuals in and approaching retirement, to seek financial advice as to how they can make the most of their pension pots and potentially meet these costs."

But this does not cover the costs of bed and board which can cost up to £12,000 a year.

At the moment pensioners with assets of more than £23,250 get no help from the state towards fees but changes to rules on means-testing under the new system will mean anyone with assets of up to £118,000 will get some financial help towards their care before they reach the cap.

A Department of Health spokesman said: "It is untrue to say any one is forced to take up a deferred payment agreement - they are voluntary.

"These new arrangements mean that people right across the country should not be forced to sell their home in their lifetime in order to fund their care costs.”